From 1st July 2021 onwards TDS on contract, Professional Fees, Rent, Interest and others (except TDS on Salary) to be deducted at higher rate for following person:-
Person who has not filed the income tax return for both of the 2 assessment years that are immediately before the previous year where the tax is to be deducted (ie for FY 21-22 check whether return is filed for FY 18-19 & FY 19-20); AND
•The time limit of ITR filing under Section 139(1) is expired ; AND
•The TDS amount deducted is Rs. 50,000 or more in each of the 2 previous years. (ie for both the FY 20-21 & FY 19-20)
It is advised to all the dealers to collect the declaration as below herewith from their vendors on their letter head.
If any on your vendor fail to provide above declaration deduct his/her TDS at higher Rates, which shall be :-
Higher of the following:-
1) Twice the rate mentioned in the act
2) 5%
Example:-
•For TDS u/s 194J Higher rate shall be 20%
• For TDS u/s 194C Higher rate shall be 5%
The said draft can be used by you as well in case asked by your customer so as they do not deduct your excess TDS.
DRAFT DECLARATION
To,
Our Company Name
We, have our registered office at . Our PAN is .
We hereby make the following declarations in relation to provisions contained in Section 206AB of the Income Tax Act, 1961, as under ‐
1. That we have filed/ not filed our income tax returns for immediately last two preceding Financial Years for which due date to file return of Income has expired as per sub section (1) of section 139 of the Income Tax Act, 1961 and details of which are as given under:
Financial Year Date of filing Acknowledgment No.
2018 – 2019
2019 ‐ 2020
2. That the aggregate of tax deducted at source and tax collected at source in our case in 26AS is more/ less than INR 50,000 in each of the previous years’ 2018‐2019 and 2019‐2020
Financial Year Sum of TDS & TCS in Form 26AS is more than INR 50,000 for the previous year
2018 – 2019
2019 ‐ 2020
3. That we will indemnify (Your Company Name) or its group companies for any loss (including but not limited to tax, interest, penalty, legal costs, etc.) incurred by it on account of any misrepresentation made by us through this declaration.
For , Authorized signatory
Name –
Designation –
Date
BARE ACT
“206AB. (1) Notwithstanding anything contained in any other provisions of this Act, where tax is required to be deducted at source under the provisions of Chapter XVIIB, other than section 192, 192A, 194B, 194BB, 194LBC or 194N on any sum or income or amount paid, or payable or credited, by a person (hereafter referred to as deductee) to a specified person, the tax shall be deducted at the higher of the following rates, namely:—
(i) at twice the rate specified in the relevant provision of the Act; or
(ii) at twice the rate or rates in force; or
(iii) at the rate of five per cent.
(2) If the provisions of section 206AA is applicable to a specified person, in addition to the provision of this section, the tax shall be deducted at higher of the two rates provided in this section and in section 206AA.
(3) For the purposes of this section “specified person” means a person who has not filed the returns of income for both of the two assessment years relevant to the two previous years immediately prior to the previous year in which tax is required to be deducted, for which the time limit of filing return of income under sub-section (1) of section 139 has expired; and the aggregate of tax deducted at source and tax collected at source in his case is rupees fifty thousand or more in each of these two previous years:
Provided that the specified person shall not include a non-resident who does not have a permanent establishment in India.
Explanation.—For the purposes of this sub-section, the expression “permanent establishment” includes a fixed place of business through which the business of the enterprise is wholly or partly carried on.]”
Disclaimer: The contents of this blog are for educational purpose and personal interpretation and should not be taken as an professional opinion as interpretation and implication of law may vary on case to case basis.